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Aviva‘s (LSE:AV.) share worth has loved blistering positive aspects during the last yr. Buyers have acquired a juicy whole return of 32.3%, together with a rising dividend. However what does that imply by way of chilly, onerous money?
Since 5 February, 2025, Aviva shares have risen 26.6% in worth, whereas its trailing dividend yield for the interval is 5.7%. It means a £10,000 funding again then would have become £13,320 right this moment.
By comparability, the broader FTSE 100 would have delivered a decrease (if nonetheless strong) return of £12,370. The query is, can the celebration over at Aviva proceed?
What do the consultants assume?
Metropolis analysts are assured Aviva’s share worth can hold rising. Eighteen of them at the moment charge the FTSE inventory, and their common 12-month worth goal is 697.2p, up 7.9% from right this moment’s ranges.
That’s far under the expansion buyers have loved during the last yr. And it appears to have one thing to do with the insurer’s present valuation. At 646.4p, its ahead price-to-earnings (P/E) ratio is 11.1 occasions, which — though not excessive on paper — remains to be above the 10-year common of seven.2.
Based mostly on these forecasts, Aviva shares may nonetheless ship a terrific return throughout the subsequent 12 months. The corporate’s ahead dividend is 6.4%, which means — if all goes effectively — a £10,000 funding right this moment would develop into £11,430 by February 2026.
What may go incorrect?
Aviva faces a sequence of challenges that would impression investor returns over the subsequent yr. Its share worth may disappoint if, as an example, shopper spending in its key UK market stays underneath stress, hitting earnings. Persistently excessive claims inflation may additionally harm efficiency, and notably at its normal insurance coverage unit.
Regardless of this, I imagine Aviva is a superb inventory to contemplate. Metropolis analysts are additionally largely optimistic on the FTSE agency, with 10 ranking it as a Robust Purchase or Purchase. Seven reckon it’s a Maintain, with only one saying it’s a Robust Promote or Promote.
Will Aviva’s share worth rise?
Aviva is without doubt one of the core holdings in my very own portfolio, so I’ve shared in these glorious returns over the previous yr. However I purchased it with a view to carry it for the lengthy haul. I feel its sturdy model energy, various product vary, and deep stability sheet put it in nice form to capitalise on the booming monetary companies market.
I particularly like the corporate’s deal with capital-light companies. This provides it sensible money era that it could use to distribute to shareholders in dividends, put money into the enterprise, or pursue bolt-on acquisitions for progress.
So what can we count on within the subsequent 12 months? Dangers stay, however the agency’s resilient efficiency in 2025 fills me with optimism. On stability, I’m anticipating one other sturdy rise in Aviva’s share worth and its dividends.
